A dissertation submitted in partial fulfillment of the requirements, School of Management

Thesis (Ph.D.) - Asian Institute of Technology, 2011

This study investigates how various factors influence customer loyalty in the mobile phone industry and how customer demographic variables moderate such relationships. Furthermore, this study evaluates the multiple roles that perceived switching costs play in determining customer loyalty in this industry; i.e. direct antecedent, mediator or moderator. A comprehensive model is proposed and tested empirically that features six antecedents identified in recent research literature {u2013} customer satisfaction, perceived service quality, value, switching costs, trust and corporate image {u2013} and common demographic variables. This model also captures the different roles of perceived switching costs. Data was collected using a field questionnaire survey of mobile phone users in Pakistan. Structural equation modeling techniques were used to evaluate the hypothesized relationships. The findings suggest that four out of the six antecedents (customer satisfaction, perceived service quality, perceived value and perceived switching costs) have a positive and significant impact on customer loyalty. Among the demographic variables, only income and area of residence were found to moderate the relationship between customer loyalty and its antecedents. Perceived switching costs were found to play all three roles, but to different degree. In addition to directly influencing customer loyalty, they mediate the impact of perceived service quality, value and trust on customer loyalty, and negatively moderate the relationships of satisfaction and perceived service quality with customer loyalty. This study extends the understanding of customer loyalty in the mobile phone industry by integrating six previously studied antecedents of customer loyalty into a single model while also simultaneously allowing the consideration of all possible roles of perceived switching costs in determining customer loyalty. As practical implications, the findings may help both the executives in the mobile phone industry in developing appropriate customer loyalty policies and the telecommunication regulatory authority of Pakistan in safeguarding the customer interests.